QUESTION NO.
QUESTION TOPIC/S AND CONCEPTS
Q1 You are a Family Court judge and
before you is a Petition for the
Declaration of Nullity of Marriage
(under Article 36 of the Family
Code) filed by Maria against Neil.
Maria claims that Neil is
psychologically incapacitated to
comply with the essential
obligations of marriage because
Neil is a drunkard, a womanizer,
a gambler, and a mama's boy-
traits that she never knew or saw
when Neil was courting her.
Although summoned, Neil did not
answer Maria's petition and never
appeared in court.
To support her petition, Maria
presented three witnesses-
herself, Dr. Elsie Chan, and
Ambrosia. Dr. Chan testified on
the psychological report on Neil
that she prepared. Since Neil
never acknowledged nor
responded to her invitation for
interviews, her report is solely
based on her interviews with
Maria and the spouses' minor
children. Dr. Chan concluded that
Neil is suffering from Narcissistic
Personality Disorder, an ailment
that she found to be already
present since Neil's early
adulthood and one that is grave
and incurable. Maria testified on
the specific instances when she
found Neil drunk, with another
woman, or squandering the
IMPORTANT ELEMENTS IN
THE SUGGESTED ANSWER
Psychological incapacity The Supreme Court held in Tan-
Andal v. Andal, May 11, 2021
(G.R. No. 196359) that
psychological incapacity need not
be scientifically or medically
proven. The proof required for
this need not be given by an
expert. Ordinary witnesses who
have been present in the life of
the spouses before the latter
contracted marriage may testify
on behaviors that they have
consistently observed from the
incapacitated spouse.
With regard to the juridical
antecedence requirement of the
psychological incapacity, the
incapacity must be characterized
as incurable. However, the Court
acknowledges that psychological
incapacity, not being an illness in
a medical sense, is not something
to be cured. As such, incurability
shall mean in a legal sense, not a
medical sense, particularly, this
means that the incapacity is so
enduring and persistent with
respect to a specific partner, and
contemplates a situation where
the couple’s respective
personality structures are so
incompatible and antagonistic
that the only result of the union
would be the inevitable and
irreparable breakdown of the
marriage.
 family's resources in a casino.
Ambrosia, the spouses' current
household help, corroborated
Maria's testimony.
On the basis of the evidence
presented, will you grant the
petition? (8%)
Q2 A collision occurred at an
intersection involving a bicycle
and a taxicab. Both the bicycle
rider (a businessman then doing
his morning exercise) and the taxi
driver claimed that the other was
at fault. Based on the police
report, the bicycle crossed the
intersection first but the taxicab,
crossing at a fast clip from the
bicycle's left, could not brake in
time and hit the bicycle's rear
wheel, toppling it and throwing
the bicycle rider into the sidewalk
5 meters away.
The bicycle rider suffered a
fractured right knee, sustained
when he fell on his right side on
the concrete side walk. He was
hospitalized and was
subsequently operated on,
rendering him immobile for 3
weeks and requiring physical
rehabilitation for another 3
months. In his complaint for
damages, the rider prayed for the
award of P1,000,000 actual
damages,P200,000 moral
damages, P200,000 exemplary
Quasi-delict (Torts) Article 2176 - Whoever by act or
omission causes damage to
another, there being fault or
negligence, is obliged to pay for
the damage done. Such fault or
negligence, if there is no pre-
existing contractual relation
between the parties, is called a
quasi-delict.
(There was clear negligence on
the part of the taxi driver which
resulted in damage and injury to
the bicycle rider and a reasonable
causal connection between the
damage and the act or omission
and the absence of contractual
relationship between them.)
Article 2214. In quasi-delicts, the
contributory negligence of the
plaintiff shall reduce the damages
that he may recover.
(It will not preclude the bicycle
rider from recovering damages,
but it will only mitigate the
damages to which he is entitled.)
 damages, P1 00,000 nominal
damages and P50,000 attorney's
fees.
Assuming the police report to be
correct and as the lawyer for the
bicycle rider, what evidence
(documentary and testimonial)
and legal arguments will you
present in court to justify the
damages that your client claims?
(8%)
Q3 Sergio is the registered owner of
a 500-square meter land. His
friend, Marcelo, who has long
been interested in the property,
succeeded in persuading Sergio
to sell it to him. On June 2, 2012,
they agreed on the purchase
price of P600,000 and that Sergio
would give Marcelo up to June30,
2012 within which to raise the
amount. Marcelo, in a light tone
usual between them, said that
they should seal their agreement
through a case of Jack Daniels
Black and P5,000 "pulutan"
money which he immediately
handed to Sergio and which the
latter accepted. The friends then
sat down and drank the first bottle
from the case of bourbon.
On June 15, 2013, Sergio learned
of another buyer, Roberto, who
was offering P800,000 in ready
cash for the land. When Roberto
confirmed that he could pay in
A. Contracts A. Article 1324 – an offer can be
B. Contracts and Sale withdrawn at any time before
acceptance by communicating
such withdrawal.
Except, when the option is
founded upon a consideration as
something paid or promised.
Sale, being a consensual
contract, is perfected by mere
consent (Sanchez vs Rigos, GR
No. L-25494, June 14, 1972).
B. Article 1356 - Contracts are
obligatory. In whatever form they
may have been entered into,
provided all the essential
requisites for their validity are
present.
Article 1357 - When the law
requires a document or other
special form, as in the acts and
enumerated by law, the
contracting parties may compel

cash as soon as Sergio could get
the documentation ready, Sergio
decided to withdraw his offer to
Marcelo, hoping to just explain
matters to his friend. Marcelo,
however, objected when the
withdrawal was communicated to
him, taking the position that they
have a firm and binding
agreement that Sergio cannot
simply walk away from because
he has an option to buy that is
duly supported by a duly
accepted valuable consideration.
(A) Does Marcelo have a
cause of action against
Sergio? (5%)
(B) Can Sergio claim that
whatever they might have
agreed upon cannot be
enforced because any
agreement relating to the
sale of real property must
be supported by evidence
in writing and they never
reduced their agreement
to writing? (3%)
Q4 Anselmo is the registered owner
of a land and a house that his
friend Boboy occupied for a
nominal rental and on the
condition that Boboy would
vacate the property on demand.
With Anselmo's knowledge,
Boboy introduced renovations
consisting of an additional
each other to observe that form,
once the contract has been
perfected, and this right may be
exercised simultaneously with the
action upon the contract.
A preparatory contract of option is
valid even if not in writing.
The option contract is separate
and distinct from the contract of
sale since in an option contract,
the optionee is not buying
anything yet except the privilege
to buy.
Even an oral sale of a parcel of
land is valid between the parties.
(Campillo vs CA, 129 SCRA 513;
Zaide vs CA 163 SCRA 71).
A. Lease Article 1678 – a lessee who
B. Lease and Damages makes improvements on the
property cannot be considered a
builder in good faith for he knows
that he does not own the property
and his possession is merely
temporary.
Boboy in this case cannot be held
bedroom, a covered veranda, and
a concrete block fence, at his own
expense.
Subsequently, Anselmo needed
the property as his residence and
thus asked Boboy to vacate and
turn it over to him. Boboy, despite
an extension, failed to vacate the
property, forcing Anselmo to send
him a written demand to vacate.
liable for damages except is he
caused unnecessary impairment
to the property leased. Since
Anselmo refused to appropriate
the improvements and to
reimburse Boboy, the latter may
exercise his right to remove the
improvements, provided he shall
not cause any more impairment
to the property leased than is
necessary.

In his own written reply, Boboy

signified that he was ready to
leave but Anselmo must first
reimburse him the value of the
improvements he introduced on
the property as he is a builder in
good faith. Anselmo refused,
insisting that Boboy cannot ask
for reimbursement as he is a
mere lessee. Boboy responded
by removing the improvements
and leaving the building in its
original state.

(A) Resolve Boboy's

claim that as a builder in
good faith, he should be
reimbursed the value of
the improvements he
introduced. (4%)

(B) Can Boboy be held

liable for damages for
removing the
improvements over
Anselmo's objection?
 (4%)
Q5 Josefa executed a deed of
donation covering a one-hectare
rice land in favor of her daughter,
Jennifer. The deed specifically
provides that:
"For and in consideration
of he love and service
Jennifer has shown and
given to me, I hereby
freely, voluntarily and
irrevocably donate to her
my one-hectare rice land
covered by TCT No.
11550, located in San
Fernando, Pampanga.
This donation shall take
effect upon my death."
The deed also contained
Jennifer's signed acceptance, and
an attached notarized declaration
by Josefa and Jennifer that the
land will remain in Josefa's
possession and cannot be
alienated, encumbered, sold or
disposed of while Josefa is still
alive.
Advise Jennifer on whether the
deed is a donation inter vivos or
mortis causa and explain the
reasons supporting your advice.
(8%)
Donation It is a donation inter vivos.
Donation mortis causa is
revocable during the lifetime of
the donor. While a donation inter
vivos, on the other hand, once
accepted is generally irrevocable.
A donation mortis causa need not
be accepted by the done during
the lifetime of the donor.
Furthermore, a prohibition on
alienation during Josefa’s lifetime
indicates that the donation is inter
vivos because the fact that Josefa
reserved the lifetime usufruct of
the land shows that her intent is
to transfer the ownership of the
donated property to Jennifer or
else there would have been no
need for her to reserve the
lifetime usufruct if it was a
donation mortis causa (Reyes vs
Mosqueda, 187 SCRA 661
(1990); Conception vs
Concepcion, 91 Phil 823 (1952).
Article 749 - If it involves
immovable property, it must be in
a public document and there must
be a deed of acceptance which
must be in the same deed of
donation.
If the acceptance is in a separate

Q6 Lito obtained a loan
of P1,000,000 from Ferdie,
payable within one year. To
secure payment, Lito executed a
chattel mortgage on a Toyota
Avanza and a real estate
mortgage on a 200-square meter
piece of property.
(A) Would it be legally
significant - from the point
of view of validity and
enforceability - if the loan
and the mortgages were
in public or private
instruments? (6%)
(B) Lito's failure to pay
led to the extra-judicial
foreclosure of the
mortgaged real property.
Within a year from
foreclosure, Lito tendered
a manager's check to
Ferdie to redeem the
property. Ferdie refused
to accept payment on the
ground that he wanted
payment in cash: the
check does not qualify as
legal tender and does not
include the interest
payment. Is Ferdie's
refusal justified? (4%)
instrument, it has to be noted in
both instruments.
Loan A. Article 1358 - Contracts
shall be obligatory in
Chattel/Real Estate Mortgage whatever form they may
have been entered into,
Legal Tender provided all the essential
requisites for their validity
are present.
A loan is a contract which the law
does not require to be in a
particular form in order that it may
be valid or enforceable.
Article 1956 - However, if the
creditor imposed interest on the
loan, the interest must be
expressly stipulated in writing,
otherwise it is void.
Act 1508, the law about chattel
mortgage, requires an affidavit of
good faith stating that the chattel
mortgage is supposed to stand as
security for the loan, it is
submitted that for validity of the
chattel mortgage, it must be in a
public document.
Furthermore, a real estate
mortgage under Art 2125 requires
that in order that a mortgage may
be validly constituted, in the
document in which it appears
must be recorded. If it is not
recoded, the mortgage is
nevertheless valid and binding
between the parties.
Hence, for validity, both chattel
and real estate mortgages must
be in a public document.

But for purposes of enforceability,

it is submitted that the form of the
contract, whether in a public or
private document, would be
immaterial (Mobil Oil vs Diocares,
GR no. L-26371).

B. A check, whether a
manager’s check or an
ordinary check, is not
legal tender. An offer of a
check in payment of a
debt is not a valid tender
of payment and may be
refused by the oblige or
creditor (Philippine
Airlines vs CA and Amelia
Tan, GR No. L-49188,
Jan 30, 1990).

Art 1249 - Mere delivery of a

check does not discharge the
obligation under a judgment. The
obligation is not extinguished and
remains suspended until the
payment by commercial
document is actually realized.

Redemption within the period

allowed by law is not a matter of
intent but a question of payment
or valid tender of full redemption
price within the said period.

Whether the redemption is being

made under Art 3135 or under the

Q7 In 2005, Andres built a residential
house on a lot whose only access
to the national highway was a
pathway crossing Brando's
property. Andres and others have
been using this pathway (pathway
A) since 1980.
In 2006, Brando fenced off his
property, thereby blocking
Andres' access to the national
highway. Andres demanded that
part of the fence be removed to
maintain his old access route to
the highway (pathway A), but
Brando refused, claiming that
there was another available
pathway (pathway B) for ingress
and egress to the highway.
Andres countered that pathway B
has defects, is circuitous, and is
extremely inconvenient to use.
To settle their dispute, Andres
and Brando hired Damian, a
geodetic and civil engineer, to
survey and examine the two
pathways and the surrounding
areas, and to determine the
shortest and the least prejudicial
way through the servient estates.
After the survey, the engineer
concluded that pathway B is the
General Banking Law, the
mortgagor or his assignee is
required to tender payment to
make said redemption valid
(Heirs of Quisimbing vs PNB and
SLDC, GR No. 178242, Jan 20,
2009).
Easement Article 650 - The easement of
right of way should be established
at a point least prejudicial to the
servient estate where the
distance from the dominant estate
to the public highway may be the
shortest.
If the these two conditions do not
concur in one estate, the criterion
of least prejudice prevails over
the shortest distance (Anastacia
Quimen vs CA and Yolanda
Oliveros, GR No. 112331, may
29, 1996).
The true test of the establishment
of an easement is adequacy.
Convenience of the dominant
estate has never been the gauge
for the establishment of the
easement (Costabella
Corporation vs CA 193 SCRA
333; Cristobal vs Ledesma, 291
SCRA 122).
 longer route and will need
improvements and repairs, but
will not significantly affect the use
of Brando's property. On the other
hand, pathway A that had long
been in place, is the shorter route
but would significantly affect the
use of Brando's property.
In light of the engineer's findings
and the circumstances of the
case, resolve the parties' right of
way dispute. (6%)
Q8 Ciriaco Realty Corporation (CRC)
sold to the spouses Del a Cruz
a500-square meter land (Lot A) in
Paranaque. The land now has a
fair market value of Pl,200,000.
CRC likewise sold to the spouses
Rodriguez, a 700-square meter
land (Lot B) which is adjacent to
Lot A. Lot B has a present fair
market value of P1,500,000.
The spouses Dela Cruz
constructed a house on Lot B,
relying on there presentation of
the CRC sales agent that it is the
property they purchased. Only
upon the completion of their
house did the spouses Dela Cruz
discover that they had built on Lot
B owned by the spouses
Rodriguez, not on Lot A that they
purchased. They spent P 1
000,000 for the house.
Right of Accession with Respect
to Immovable Property
Article 448 - The owner of the
land on which anything has been
built in good faith by another has
the right to appropriate as his own
the works, sowing or planting
after payment of the indemnity or
to oblige the builder to pay the
price of the land if its value is not
considerably higher than the
building or trees or to ask the
sower to pay proper rent.
Sps Dela Cruz has the right to
retain possession of the premises
until Rodriguez exercises any of
the options under Article 448 of
the Civil Code (Tecnogas
Manufacturing vs CA, GR No.
108894, Feb 10, 1997).
Before constructing their house,
Sps. Dela Cruz exercised due
diligence and relied on the

As their lawyer, advise the
spouses Dela Cruz on their rights
and obligations under the given
circumstances, and the recourses
and options open to them to
protect their interests. (8%)
Q9 Rica petitioned for the annulment
of her ten-year old marriage to
Richard. Richard hired Atty. Cruz
to represent him in the
proceedings. In payment for Atty.
Cruz's acceptance and legal fees,
Richard conveyed to Atty. Cruz a
parcel of land in Taguig that he
recently purchased with his lotto
winnings. The transfer documents
were duly signed and Atty. Cruz
immediately took possession by
fencing off the property's entire
perimeter.
Desperately needing money to
pay for his mounting legal fees
and his other needs and despite
the transfer to Atty. Cruz, Richard
offered the same parcel of land
for sale to the spouses Garcia.
After inspection of the land, the
spouses considered it a good
investment and purchased it from
Richard. Immediately after the
sale, the spouses Garcia
commenced the construction of a
three-story building over the land,
but they were prevented from
doing this by Atty. Cruz who
information given by the agent
who is presumed to know the
identity of the lot they purchased,
making them builders in good
faith.
Capacity to Buy or Sell The claim of Atty Cruz is not
correct. While Atty. Cruz may
appear to have a better right
considering that he first took
possession of the property, as the
lawyer for Richard, he is
prohibited from acquiring by
purchase, even at a public or
judicial auction, either in person
or through the mediation of
another, the property and rights
which may the object of any
litigation in which he may take
part by virtue of his profession
(Article 1491, Civil Code).
The suit in this case is for
annulment of marriage and the
land is not the object of the
litigation. However, if the
annulment of marriage is granted,
the liquidation of the absolute
community or conjugal
partnership of the spouses, as the
case may be, will follow as a
necessary consequence (Article
50 in relation to Article 43 of the
Family Code).
On the assumption that the

claimed he has a better right in
light of the prior conveyance in
his favor.
Is Atty. Cruz's claim correct? (8%)
Q10 Manuel was born on 12 March
1940 in a 1 000-square meter
property where he grew up
helping his father, Michael,
cultivate the land. Michael has
lived on the property since the
land was opened for settlement at
about the time of the
Commonwealth government in
193 5, but for some reason never
secured any title to the property
other than a tax declaration in his
name. He has held the property
through the years in the concept
of an owner and his stay was
uncontested by others. He has
also conscientiously and
continuously paid the realty taxes
parties are governed by either the
regime of absolute community or
conjugal partnership of gains, all
winnings from gambling or betting
shall form part thereof.
Hence, since Richard purchased
the land with his lotto winnings
during the pendency of the suit,
the land itself forms part of the
regime.
As such, it may not be sold or
alienated without the consent of
Rica (wife), because any
disposition or encumbrance of the
property of the community or
conjugal property without the
consent of the other spouse is
void (Article 96 and Article 124 of
the Family Code).
Registration of land For purposes of confirmation of
imperfect title, the provisions of
Commonwealth Act No. 141, as
well as the Property Registration
Decree or PD 1529, should be
considered.
CA No. 141, which amended the
second Public Land Act, provides
that there are two requisites for
judicial confirmation of imperfect
title: 1) open and continuous,
exclusive, and notorious
possession and occupation of the
land by himself or through his
predecessors in interest under a
bona fide claim of ownership
since June 12, 1945; and 2) the
classification of the land as
 on the land.
Michael died in 2000 and Manuel
- as Michael’s only son and heir -
now wants to secure and register
title to the land in his own name.
He consults you for legal advice
as he wants to perfect his title to
the land and secure its
registration in his name.
(A) What are the laws
that you need to consider
in advising Manuel on
how he can perfect his
title and register the land
in his name? Explain the
relevance of these laws
to your projected course
of action. (4%)
(B) What do you have to
prove to secure Manuel's
objectives and what
documentation are
necessary? (4%)
Q11 Armand died intestate. His full-
blood brothers, Bobby and
Conrad, and half-blood
alienable and disposable land of
the public domain (Sec of DENR
vs Yap, GR No. 167707, Oct 8,
2008).
The Property Registration Decree
(PD 1529) specifies who may file
an application for registration of
title to the land under Sec 14.
Section 14 provides that: Those
who, by themselves or their
predecessors-in-interest, who
have been in open, continuous,
exclusive and notorious
possession and occupation of
alienable and disposable lands
for the public domain under a
bona fide claim of ownership
since June 12, 1945 or earlier.
B.It must be proven that the land
was declared alienable at the
time that Manuel or his father,
Michael, took possession of the
land and that their possession
started prior to or on June 12,
1945, as required by CA no. 141.
An application for registration of
all original muniments of title of
copies thereof and a survey plan
of the land approved by the
Bureau of Lands in accordance
with Sec 17 of PD 1529 should
also be submitted.
Order of intestate
1) E. In intestate succession
if all the brothers and sisters
brothers, Danny, Edward and of the decedent predeceased
Floro, all predeceased him. The the latter, the nephews and
following are the surviving nieces inherit in their own
relatives: right or per capita and not by
right of representation. (See
1. Benny and Bonnie, Article 975)
legitimate children of
Bobby;
2) E. Dante will not inherit
because his is an illegitimate
2. Cesar, legitimate child
of Conrad; child of a legitimate half-
brother of Armand thus the
3. Dante, illegitimate barrier applies.
child of Danny;
3) A. Ernie will not inherit
4. Ernie, adopted child because being an adopted
of Edward; and child of Edward, he cannot
inherit from the relatives of
5. Felix, grandson of the latter as the adoption
Floro. creates only a relationship
between adopter and
The net value of adopted. (Sayson v. CA 205
Armand's estate is SCRA 321)
Pl,200,000.
4) D. Felix is not entitled to
I. (1) How much do inherit because the right of
Benny and Bonnie stand representation in the
to inherit by right of collateral line is only
representation? (1%) available to nephews and
nieces of the decedent and
(A) P200,000 not to grandnephews or
grandnieces.
(B) P300,000

(C) P400,000
 (D) P150,000

(E) None of the

above.

I. (2) How much is

Dante's share in the net
estate? (1%)

(A) P150,000.

(B) P200,000.

(C) P300,000.

(D) P400,000.

(E) None of the

above.

I. (3) How much is

Ernie's share in the net
estate . (1%)

(A) P 0.

(B) P400,000.

(C) P150,000.

(D) P200,000.

(E) None of the

above.
 I. (4) How much is
Felix's share in the net
estate? (1%)

(A) P400,000.

(B) P150,000.

(C) P300,000.

(D) P0.

(E) None of the

above.

Q12 A, B, C and D are the solidary Obligations C. [Under Art. 1217 when
debtors of X for P40,000. X one of the solidary debtors
released D from the payment of cannot because of his
his share of PI 0,000. When the insolvency reimburse his
obligation became due and
share to the debtor paying,
demandable, C turned out to be
insolvent.
such share shall be borne by
all his codebtors in proportion
Should the share of insolvent to the debt of each.]
debtor C be divided only
between the two other
remaining debtors, A and B?
(1%)

(A) Yes. Remission of

D's share carries with it
total extinguishment of
his obligation to the
benefit of the solidary
 debtors.

(B) Yes. The Civil Code

recognizes remission as
a mode of extinguishing
an obligation. This
clearly applies to D.

(C) No. The rule is that

gratuitous acts should
be restrictively
construed, allowing only
the least transmission of
rights.

(D) No, as the release of

the share of one debtor
would then increase the
burden of the other
debtors without their
consent.

Q13 Amador obtained a loan Real estate mortgage

of P300,000 from Basilio (1) B. Basilio has in his favor
payable on March25, 2012. As a REM and he should
security for the payment of his exhaust his legal remedies
loan, Amador constituted a
against Amador. (Art. 2058)
mortgage on his residential
house and lot in Basilio's favor.
Cacho, a good friend of (2) A. Art. 2126 The
Amador, guaranteed and mortgage directly and
obligated himself to pay Basilio, immediately subjects the
in case Amador fails to pay his property upon which it is
loan at maturity. imposed, whoever the
possessor may be to the
 fulfillment of the obligation for
III. (1) If Amador fails to whose security it was
pay Basilio his loan on constituted.
March 25, 2012, can
Basilio compel Cacho to
pay? (1%)

(A) No, Basilio

cannot compel
Cacho to pay
because as
guarantor,
Cacho can
invoke the
principle of
excussion, i.e.,
all the assets of
Basilio must first
be exhausted.

(B) No, Basilio

cannot compel
Cacho to pay
because Basilio
has not
exhausted the
available
remedies
against Amador.

(C) Yes, Basilio

can compel
Cacho to pay
because the
nature of
Cacho's
undertaking
 indicates that he
has bound
himself solidarily
with Amador.

(D) Yes, Basilio

can compel
Cacho who
bound himself to
unconditionally
pay in case
Amador fails to
pay; thus the
benefit of
excussion will
not apply.

III. (2) If Amador sells

his residential house
and lot to Diego, can
Basilio foreclose the real
estate mortgage? (1%)

(A) Yes, Basilio

can foreclose
the real estate
mortgage
because real
estate mortgage
creates a real
right that
attaches to the
property.

(B) Yes, Basilio

can foreclose
 the real estate
mortgage. It is
binding upon
Diego as the
mortgage is
embodied in a
public
instrument.

(C) No, Basilio

cannot foreclose
the real estate
mortgage. The
sale confers
ownership on
the buyer,
Diego, who must
therefore
consent.

(D) No, Basilio

cannot foreclose
the real estate
mortgage. To
deprive the new
owner of
ownership and
possession is
unjustand
inequitable.

Q14 Cruz lent Jose his car until Jose

finished his Bar exams. Soon (1) Loan (1) D. In commodatum, the
after Cruz delivered the car, bailee is obliged to pay for
Jose brought it to Mitsubishi (2) Loan the ordinary expenses for the
Cubao for maintenance check use and preservation of the
up and incurred costs thing loaned (Art. 1941, Civil
of P8,000. Seeing the car's Code). The bailee, Jose, has
peeling and faded paint, Jose no right of retention on the
also had the car repainted
ground that Cruz has not
for P10,000. Answer the two
questions below based on these
reimbursed the useful
common facts. expenses for preservation
which Jose incurred.
IV. (1) After the bar
exams, Cruz asked for (2) D. Commodatum is purely
the return of his car. personal in nature, hence the
Jose said he would bailee can neither lend nor
return it as soon as Cruz lease the object of the
has reimbursed him for contract to a third person.
the car maintenance
and repainting costs of
P 18,000.

Is Jose's refusal
justified? (1%)

(A) No, Jose's

refusal is not
justified. In this
kind of contract,
Jose is obliged
to pay for all the
expenses
incurred for the
preservation of
the thing loaned.

(B) Yes, Jose's

refusal is
justified. He is
obliged to pay
 forall the
ordinary and
extraordinary
expenses, but
subject to
reimbursement
from Cruz.

(C) Yes, Jose's

refusal is
justified. The
principle of
unjust
enrichment
warrants the
reimbursement
of Jose's
expenses.

(D) No, Jose's

refusal is not
justified. The
expenses he
incurred are
useful for the
preservation of
the thing loaned.
It is Jose's
obligation to
shoulder these
useful expenses.

IV. (2) During the bar

exam month, Jose lent
the car to his girlfriend,
Jolie, who parked the
car at the Mall of Asia's
open parking lot, with
the ignition key inside
the car. Car thieves
broke into and took the
car.

Is Jose liable to Cruz for

the loss of the car due to
Jolie's negligence? (1%)

(A) No, Jose is

not liable to Cruz
as the loss was
not due to his
fault or
negligence.

(B) No, Jose is

not liable to
Cruz. In the
absence of any
prohibition, Jose
could lend the
car to Jolie.
Since the loss
was due to force
majeure, neither
Jose nor Jolie is
liable.

(C) Yes, Jose is

liable to Cruz.
Since Jose lent
the car to Jolie
without Cruz's
 consent, Jose
must bear the
consequent loss
of the car.

(D) Yes, Jose is

liable to Cruz.
The contract
between them is
personal in
nature. Jose can
neither lend nor
lease the car to
a third person.

Q15 In 2005, L, M, N, 0 and P Partnership

formed a partnership. L, M and
N were capitalist partners who
contributed P500,000 each,
while 0, a limited partner,
contributed P1 ,000,000. P
joined as an industrial partner,
contributing only his services.
The Articles of Partnership,
registered with the Securities
and Exchange Commission,
designated L and 0 as
managing partners; L was liable
only to the extent of his capital
contribution; and P was not
liable for losses.
In 2006, the partnership earned
a net profit of P800,000. In the
same year, P engaged in a
1) C. Since after deducting
the P100k share of P there
remains P700k, the three
partners L, M, N will each
have 1 share and O will have
two shares (2:1) three shares
plus two shares, the balance
of P700k will be divided by 5
which will yield the result of
P140k multiplied by 2 (for O)
2) D - Article 1797 share in
profits and losses is
proportionate to contribution.
3) A – Article 1799 a
stipulation which excludes
one or more partners from

different business with the
consent of all the partners.
However, in 2007, the
partnership incurred a net loss
of P500,000. In 2008,the
partners dissolved the
partnership. The proceeds of
the sale of partnership assets
were insufficient to settle its
obligation. After liquidation, the
partnership had an unpaid
liability ofP300,000.
any share in profits and
losses is void. P, industrial
partner may be exempt but
that is only with respect to
the partners but not the
creditors. O, by taking part in
the management even if he is
a limited partner becomes
liable as a general partner
(Article 1848)

V. (l) Assuming that the

just and equitable share
of the industrial partner,
P, in the profit in 2006
amounted to P1 00,000,
how much is the share
of 0, a limited partner, in
the P800,000 net profit?
(1%)

(A) P160,000.

(B) P175,000.

(C) P280,000.

(D) P200,000.

(E) None of the

above.

V. (2) In 2007, how

much is the share of 0, a
limited partner, in the
net loss of P500,000?
(1%)

(A) P 0.

(B) P1 00,000.

(C) P125,000.

(D) P200,000.

(E) None of the

above.

V. (3) Can the

partnership creditors
hold L, 0 and Pliable
after all the assets of the
partnership are
exhausted? (1%)

(A) Yes. The

stipulation
exempting P
from losses is
valid only among
the partners. L is
liable because
the agreement
limiting his
liability to his
capital
contribution is
not valid insofar
as the creditors
are concerned.
Having taken
part in the
management of
the partnership,
0 is liable as
capitalist
partner.

(B) No. P is not

liable because
there is a valid
stipulation
exempting him
from losses.
Since the other
partners allowed
him to engage in
an outside
business
activity, the
stipulation
absolving P from
liability is valid.
For 0, it is basic
that a limited
partner is liable
only up to the
extent of his
capital
contribution.

(C) Yes. The

stipulations
exempting P and
L from losses
are not binding
 upon the
creditors. 0 is
likewise liable
because the
partnership was
not formed in
accordance with
the requirements
of a limited
partnership.

(D) No. The Civil

Code allows the
partners to
stipulate that a
partner shall not
be liable for
losses. The
registration of
the Articles of
Partnership
embodying such
stipulations
serves as
constructive
notice to the
partnership
creditors.(E)
None of the
above is
completely
accurate.

Q16 Gary is a tobacco trader and Obligations

also a lending investor. He sold (1) B or D.
tobacco leaves to Homer for
delivery within a month,
although the period for delivery
was not guaranteed. Despite (2) A. [Under Art 1198 (2) of
Gary's efforts to deliver on time, the Civil Code, the debtor
transportation problems and shall lose every right to make
government red tape hindered
use of the period when he
his efforts and he could only
deliver after 30 days. Homer
does not furnish to the
refused to accept the late creditor the guaranties or
delivery and to pay on the securities which he has
ground that the agreed term had promised.]
not been complied with.

As lending investor, Gary

granted a Pl,000,000 loan to
Isaac to be paid within two
years from execution of the
contract. As security for the
loan, Isaac promised to deliver
to Gary his Toyota Innova within
seven (7) days, but Isaac failed
to do so. Gary was thus
compelled to demand payment
for the loan before the end of
the agreed two-year term.

VI. (l) Was Homer

justified in refusing to
accept the tobacco
leaves? (1%)

(A) Yes. Homer

was justified in
refusing to
accept the
tobacco leaves.
The delivery was
to be made
within a month.
Gary's promise
of delivery on a
"best effort"
basis made the
delivery
uncertain. The
term, therefore,
was ambiguous.

(B) No. Homer

was not justified
in refusing to
accept the
tobacco leaves.
He consented to
the terms and
conditions of the
sale and must
abide by it.
Obligations
arising from
contract have
the force of law
between the
contracting
parties.

(C) Yes. Homer

was justified in
his refusal to
accept the
delivery. The
contract
contemplates an
obligation with a
term. Since the
 delivery was
made after 30
days, contrary to
the terms
agreed upon,
Gary could not
insist that Homer
accept the
tobacco leaves.

(D) No. Homer

was not justified
in refusing to
accept the
tobacco leaves.
There was no
term in the
contract but a
mixed condition.
The fulfillment of
the condition did
not depend
purely on Gary's
will but on other
factors, e.g., the
shipping
company and
the government.
Homer should
comply with his
obligation.

VI. (2) Can Gary compel

Isaac to pay his loan
even before the end of
the two-year period?
(1%)

(A) Yes, Gary

can compel
Isaac to
immediately pay
the loan. Non-
compliance with
the promised
guaranty or
security renders
the obligation
immediately
demandable.
Isaac lost his
right to make
use of the
period.

(B) Yes, Gary

can compel
Isaac to
immediately pay
the loan. The
delivery of the
Toyota Innova is
a condition for
the loan. Isaac's
failure to deliver
the car violated
the condition
upon which the
loan was
granted. It is but
fair for Gary to
demand
immediate
payment.

(C) No, Gary

cannot compel
Isaac to
immediately pay
the loan. The
delivery of the
car as security
for the loan is an
accessory
contract; the
principal
contract is still
the P 1,000,000
loan. Thus,
Isaac can still
make use of the
period.

(D) No, Gary

cannot compel
Isaac to
immediately pay
the loan. Equity
dictates that
Gary should
have granted a
reasonable
extension of
time for Isaac to
deliver his
Toyota Innova. It
would be unfair
and burdensome
for Isaac to pay
the P1,000,000
 simply because
the promised
security was not
delivered.

Q17 Lito was a commercial pilot who
flew for Pacific-Micronesian Air.
In 1998, he was the co-pilot of
the airline's Flight MA916 that
mysteriously disappeared two
hours after take-off from Agana,
Guam, presumably over the
Pacific Ocean. No trace of the
plane and its 105 passengers
and crew was ever found
despite diligent search; Lito
himself was never heard of
again. Lito left behind his wife,
Lita, and their two children.
Void and voidable marriages
(1) A, since Lito is still alive
the marital bond has not
been severed
(2) C. Lito’s absence did not
automatically grant Lita the
right to remarry without
securing a declaration of
presumptive death.

In 2008, Lita met and and

married Jaime. They now have
a child of their own.

While on a tour with her former

high school classmates in a
remote province of China in
2010, Lita was surprised to see
Lito or somebody who looked
exactly like him, but she was
sure it was Lito because of the
extreme surprise that registered
in his face when he also saw
her. Shocked, she immediately
fled to her hotel and post haste
returned to the country the next
day. Lita now comes to you for
legal advice. She asks you the
following questions:

VII. (l) If Lito is alive,

what is the status of his
marriage to Lita? (1%)

(A) The
marriage
subsists
because the
marital bond has
not been
terminated by
death.

(B) The
marriage was
terminated when
Lita married
Jaime.

(C) The
marriage
subsists
because Lita's
marriage to
Jaime is void.

(D) The
marriage is
terminated
because Lito is
presumed dead
 after his plane
has been
missing for more
than 4 years.

(E) The
marriage can be
formally
declared
terminated if Lito
would not
resurface.

VII. (2) If Lito is alive,

what is the status of
Lita's marriage to
Jaime? (1%)

(A) The
marriage is valid
because Lita's
marriage to Lito
was terminated
upon Lito's
disappearance
for more than
seven years.

(B) The
marriage is
valid. After an
absence of more
than 10 years,
Lito is already
presumed dead
 for all purposes.

(C) The
marriage is void.
Lito's mere
absence,
however
lengthy, is
insufficient to
authorize Lita to
contract a
subsequent
marriage.

(D) The
marriage is void.
If Lito is indeed
alive, his
marriage to Lita
was never
dissolved and
they can resume
their marital
relations at any
time.

Q18 Which of the following actions or Contracts A. [In Asia Productions v.

defenses are meritorious: (1%) Pano (205 SCRA 458) the
SC allowed recovery of the
(A) An action for partial payment made by the
recovery of buyer of a building under a
downpayment paid verbal contract of sale
under a rescinded oral
because the buyer is not
sale of real property.
seeking the enforcement of
the contract and at any rate it
 is not covered by the statute
(B) A defense in an of frauds.]
action for ejectment that
the lessor verbally
promised to extend or
renew the lease.

(C) An action for

payment of sum of
money filed against one
who orally promised to
answer another's debt in
case the latter defaults.

(D) A defense in an
action for damages that
the debtor has sufficient,
but unliquidated assets
to satisfy the credit
acquired when it
becomes due.

(E) None of the above.

Q19 Betty entrusted to her agent, Possession A. Article 559 of the Civil
Aida, several pieces of jewelry Code applies (See Dizon vs.
to be sold on commission with Suntay 47 SCRA 160)
the express obligation to turn
over to Betty the proceeds of
the sale, or to return the
jewelries if not sold in a month's
time. Instead of selling the
jewelries, Aida pawned them
with the Tambunting Pawnshop,
and used the money for herself.
Aida failed to redeem the
pawned jewelries and after a
month, Betty discovered what
Aida had done. Betty brought
criminal charges which resulted
in Aida's conviction for estafa.

Betty thereafter filed an action

against Tambunting Pawnshop
for the recovery of the jewelries.
Tambunting raised the defense
of ownership, additionally
arguing that it is duly licensed to
engage in the pawnshop and
lending business, and that it
accepted the mortgage of the
jewelry in good faith and in the
regular course of its business.

If you were the judge, how will

you decide the case? (1%)

(A) I will rule in favor of

Betty. My ruling is based
on the Civil Code
provision that one who
has lost any movable or
has been unlawfully
deprived thereof may
recover it from the
person in possession of
the same. Tam bunting's
claim of good faith is
inconsequential.

(B) I will rule in favor of

Betty. Tambunting's
claim of good faith pales
 into insignificance in
light of the unlawful
deprivation of the
jewelries. However,
equity dictates that
Tambunting must be
reimbursed for the pawn
value of the jewelries.

(C) I will rule in favor of

Tambunting. Its good
faith takes precedence
over the right of Betty to
recover the jewelries.

(D) I will rule in favor of

Tambunting. Good faith
is always presumed.
Tambunting's lawful
acquisition in the
ordinary course of
business coupled with
good faith gives it legal
right over the jewelries.

Q20 Arlene owns a row of apartment Lease

houses in Kamuning, Quezon
City. She agreed to lease
Apartment No. 1 to Janet for a
period of 18 months at the rate
of P10,000 per month. The
lease was not covered by any
contract. Janet promptly gave
Arlene two (2) months deposit
and 18 checks covering the
(1) D. [Recovery of advance
rental payments made is not
covered by the statute of
frauds because its purpose it
not to perpetrate fraud but to
prevent fraud.]
(2) D – although the lease
rental payment for 18 months. itself is valid even if verbal,
This show of good faith the right of first refusal is a
prompted Arlene to promise different matter because a
Janet that should Arlene decide verbal promise to grant a
to sell the property, she would
right of first refusal which in
give Janet the right of first
refusal.
essence is a promise to sell
is unenforceable under the
X. (1) Not long after Statute of Frauds
Janet moved in, she
received news that her
application for a Master
of Laws scholarship at
King's College in
London had been
approved. Since her
acceptance of the
scholarship entailed a
transfer of residence,
Janet asked Arlene to
return the advance
rental payments she
made. Arlene refused,
prompting Janet to file
an action to recover the
payments. Arlene filed a
motion to dismiss,
claiming that the lease
on which the action is
based, is unenforceable.

If you were the judge,

would you grant Arlene's
motion? (1%)

(A) Yes, I will

grant the motion
because the
lease contract
between Arlene
and Janet was
not in writing,
hence, Janet
may not enforce
any right arising
from the same
contract.

(B) No, I will not

grant the motion
because to allow
Arlene to retain
the advance
payments would
amount to unjust
enrichment.

(C) Yes, I will

grant the motion
because the
action for
recovery is
premature;
Janet should
first secure a
judicial
rescission of the
contract of
lease.

(D) No. I will not

grant the motion
because the
cause of action
 does not seek to
enforce any right
under the
contract of
lease.

X. (2)Assume that Janet

decided not to accept
the scholarship and
continued leasing
Apartment No. 1.
Midway through the
lease period, Arlene
decided to sell
Apartment No. 1 to Jun
in breach of her promise
to Janet to grant her the
right of first refusal.
Thus, Janet filed an
action seeking the
recognition of her right
of first refusal, the
payment of damages for
the violation of this right,
and the rescission of the
sale between Arlene
and Jun.

Is Janet's action
meritorious? (1%)

(A) Yes, under

the Civil Code, a
promise to buy
and sell a
determinate
thing is
reciprocally
demandable.

(B) No, the

promise to buy
and sell a
determinate
thing was not
supported by a
consideration.

(C) Yes, Janet's

right of first
refusal was
clearly violated
when the
property was not
offered for sale
to her before it
was sold to Jun.

(D) No, a right of

first refusal
involves an
interest over real
property that
must be
embodied in a
written contract
to be
enforceable.

(E) None of the

above.